4 min read

StepN - can the Move-to-Earn model be sustainable?

Trying to lose weight or keep healthy? There's a new way to earn crypto by getting out there in the sun and exercising. We check out whether it lives up to its promise.
StepN - can the Move-to-Earn model be sustainable?

In this paradigm, you get paid cryptocurrencies for moving outdoors and turning on your GPS - walking, jogging or running - up to a certain limit per day. You can sell, reinvest or trade the rewards at your own peril, powered by DeFi mechanics.

StepN, a move-to-earn application launched on Solana and BNB Chain, has seen incredible traction since launch last year, growing to more than 300,000 active users. Other copycats like Dotmoovs and Genopets have since emerged and are currently in initial stages of launch.

Stepn's website

In StepN, there are four main types of sneakers, and each sneaker has its own traits, optimal speed for earning rewards, and other nuances that gamify the whole experience of running.

For example, the Walker sneaker rewards you with 4 GST tokens - the utility token of StepN - for every energy spent. You have to walk at a speed of 1 to 6 km/h to qualify.

Then, you can purchase a virtual sneaker NFT on the marketplace, with costs ranging from US$800 to US$5000 denominated in Solana (SOL) tokens. A fraction of trading proceeds goes to StepN.

Stepn Marketplace

Once you've purchased one, equip it and start moving. You earn GST rewards for doing so.

The mechanics is quite brilliant, as unlike traditional DeFi protocols, Stepn has several time-gated mechanics to prevent massive supply pressure on the rewards token.

For example, there are anti-cheating mechanisms where you don't earn rewards if you're moonwalking, i.e. stationary. You can't use a phone shaker and earn free rewards unless you can somehow spoof your GPS. There's an optimal speed range to walk or run in so you cannot sit on a car and clock rewards. You need a strong GPS signal to earn rewards.

After running, you need to spend utility tokens to repair your shoe, otherwise they lose durability and impact your earnings. The app also creates supply sinks by incentivising you to spend GST tokens to level your shoe up, making it more efficient at earning rewards.

There are also daily caps on energy, users cannot create an infinite amount of reward tokens from exercising. Energy replenishes 25% every 6 hours until it reaches the cap.

Stepn energy caps

You can also mint a new sneaker to sell after a certain level, or swap the token to USDC - a stablecoin - if you're planning to encash the rewards.

Sign ups are gated behind a referral wall, and as an invite-only game, users can earn one activation code for every 10 Energy spent to invite their friends into the system. This dampens short-term demand but the waitlist for social onboarding creates a stronger, longer term community.

Well is it sustainable?

We think that StepN's model improves existing DeFi protocols tokenomics by a significant bunch. Unlike DeFi protocols where users or whales with large capital can move into a liquidity pool for large sum of rewards and control the supply, StepN rewards are gated by not only your initial and total investment but also time.

There's a maximum amount of energy replenished per day that allows you to earn rewards, and in order to earn more rewards, you need to invest into the system aggressively, creating demand for the token itself. It becomes difficult to simply use your capital to farm rewards and sell on the market.

StepN also combines best-in-class features from multiple systems: Social (referrals and growth hacking), DeFi (trading and marketplaces), NFTs, Gaming and Fitness.  

The core product of StepN is very sticky and the whole gamification of exercising on Web3 is merely taking an already popular concept like AIA Vitality and Lumi Health and putting it on a global stage with gamification mechanics and blockchain efficiency.

It's like signing up for a gym membership and the gym gives you cashback in vouchers over a period of time for as long as you attend the gym every day. You tell your friends and family about it and everyone gets excited about earning vouchers, signs up for a gym membership and gets vouchers.

Over time, without new gym go-ers to sustain the payouts, the gym cannot pay rewards anymore. However, it wants to drag the doomsday scenario to infinity - by saying, okay, each friend can only invite one person, and you can only invite once you attend 2 weeks of gym training.

The growth of new gym-goers will not stop, but eventually, the gym needs to find ways of capturing value back. For instance, it could start reducing reward payouts, increasing new joiners' membership costs, charge more fees for using the gym facilities, or create ways where existing gym go-ers would actually spend more money at the gym (e.g. boxing classes perhaps?).

We can see where this is going, and StepN works the same way too. It could bring new features into the app, monetize with brand collaborations and sponsorships, increase marketplace fees and many more.

It's still too early to say whether StepN collapses like other ponzis or grows into a global fitness phenomenon. But it's clear that Move-to-Earn has found a new consumer base on its own.

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